There will always be a need for licensees, as long as financial advisers need an Australian financial services licence authorisation to operate.

However, to ensure relevance and longevity, the licensee business model must be based on more than a mandated requirement. It must also continuously evolve to keep pace with changing adviser needs and expectations.

For too many advisers, it hasn’t stacked up and now the cost is real with the removal of subsidies, leading to greater dissatisfaction and scrutiny.

This has created opportunities for alternative service providers.

These utility players are focused on core traditional dealer services like licensing, brokerage and compliance, which are fast becoming commoditised.

Instead, the licensee that prevails will ensure their focus is on adding value in areas like human resources, business coaching and technology solutions.

This is the territory that advisers care most about.

While foundational dealer services remain essential, they don’t drive adviser satisfaction or excitement.

Yet, if they’re not done right, it’s a huge source of dissatisfaction.

Traditional dealer services are merely a ticket to the game. They’re “hygiene” factors. Excellent hygiene is a given so it’s difficult to charge top dollar for it, highlighting the importance of scale to push down costs.

The Apple iPhone provides a useful analogy. At the core, it’s a smart phone. It enables people to make and receive calls, send and receive emails, and access the internet. But that’s just the beginning. People can also take photos, make videos, keep a calendar, play games, listen to music and much more.

Smart phones are a commodity but it is the iPhone’s design, functionality and innovation that drives sales, customer satisfaction and brand loyalty.

Similarly, licensing must be just the beginning. To attract and retain quality businesses, licensees must expand their value proposition.

They must demonstrate the capability and capacity to help advisers efficiently deliver quality advice and effectively manage and grow their businesses.